Cogeco Cable Inc, the main unit of media and telecom company Cogeco Inc, will buy Peer 1 Network Enterprises Inc for about C$526 million ($532 million) to expand its cloud computing and data hosting business.

Cogeco Cable (Montreal, Canada), which provides cable-TV, high-speed internet and telephone services, has been looking to increase its presence in the fast-growing data-center business due to tough competition in signing up new television customers in Canada.

The Montreal-based company, which competes with Rogers Communications Inc (Toronto, Canada) and Telus Corp (Burnaby, Canada), bought cable operator Atlantic Broadband (Quincy, USA) for $1.36 billion earlier this year to gain a foothold in the larger U.S. market.

Through the acquisition of Peer 1 (Vancouver, Canada), Cogeco Cable will add 19 data centers to the six it operates as demand for web hosting services rises mainly from small and mid-sized businesses.

Data centers house large-capacity server computers and data-storage systems which are connected to the Internet via high-bandwidth links.

Cogeco Cable's data hosting business is expected to rise 10 percent per year organically, the company said in its annual report earlier this year.